G.R. No. 207791. July 15, 2015.

*
 
THE CITY OF DAVAO, represented by THE CITY
TREASURER OF DAVAO CITY, petitioner, vs. THE
INTESTATE ESTATE OF AMADO S. DALISAY,
represented by SPECIAL ADMINISTRATOR ATTY.
NICASIO B. PADERNA, respondent.

Tax Sales; Redemption; In a long line of cases, the Supreme

Court (SC) has indeed been copious in its stance to allow the
redemption of property where in doing so, the ends of justice are
better realized.—The Court need not belabor the existence of this
rule in jurisprudence. In a long line of cases, the Court has indeed
been copious in its stance to allow the redemption of property
where in doing so, the ends of justice are better realized. Doronila
v. Vasquez, 72 Phil. 572 (1941), allowed redemption in certain
cases even after the lapse of the one-year period in order to
promote justice and avoid injustice. In Tolentino v. Court of
Appeals, 106 SCRA 513 (1981), the policy of the law to aid rather
than defeat the right of redemption was expressed, stressing that
where no injury would ensue, liberal construction of redemption
laws was to be pursued and the exercise of the right to
redemption to be permitted to better serve the ends of justice. In
De los Reyes v. Intermediate Appellate Court, 176 SCRA 394
(1989), the rule was liberally interpreted in favor of the original
owner of the property to give him another opportunity, should his
fortunes improve, to recover his property.
Same; Same; Redemption is by force of law, and the purchaser
at public auction is bound to accept it.—While it is a given that
redemption by property owners is looked upon with favor, it is
equally true that the right to redeem properties remains to be a
statutory privilege. Redemption is by force of law, and the
purchaser at public auction is bound to accept it. Further, the
right to redeem property sold as security for the satisfaction of an
unpaid obligation does not exist preternaturally. Neither is it
predicated on proprietary right, which, after the sale of the
property on execution, leaves the judgment debtor and vests in
the purchaser. Instead, it is a bare statu-

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 *  SECOND DIVISION.

 
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tory privilege to be exercised only by the persons named in

the statute.
Same; Same; A valid redemption of property must
appropriately be based on the law which is the very source of this
substantive right.—A valid redemption of property must
appropriately be based on the law which is the very source of this
substantive right. It is, therefore, necessary that compliance with
the rules set forth by law and jurisprudence should be shown in
order to render validity to the exercise of this right. Hence, when
the Court is beckoned to rule on this validity, a hasty resort to
elementary rules on construction proves inadequate. Especially
so, when there are deeper underpinnings involved, not only as to
the right of the owner to take back his property, but equally
important, as to the right of the purchaser to acquire the property
after deficient compliance with statutory requirements, including
the exercise of the right within the period prescribed by law.
Same; Same; The right acquired by the purchaser at an
execution sale is inchoate and does not become absolute until after
the expiration of the redemption period without the right of
redemption having been exercised.—The Court cannot close its
eyes and automatically rule in favor of the redemptioner at all
times. The right acquired by the purchaser at an execution sale is
inchoate and does not become absolute until after the expiration
of the redemption period without the right of redemption having
been exercised. “But inchoate though it be, it is, like any other
right, entitled to protection and must be respected until
extinguished by redemption.” Suffice it to say, the liberal
application of redemption laws in favor of the property owner is
not an austere solution to a controversy, where there are
remarkable factors that lead to a more sound and reasonable
interpretation of the law. Here, the proper focus of the CA should
have been the just and fair interpretation of the law, instead of an
automatic and constricted view on its liberal application.
Same; Same; Forfeiture of tax delinquent properties transpires
no later than the purchase made by the city due to lack of a bidder
from the public.—The better theory that is consistent with the
subject matter of the provision is that forfeiture of tax delinquent
properties transpires no later than the purchase made by the city
due to lack of a bidder from the public. This happens on the date
of the sale,

 
 
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and not upon the issuance of the declaration of forfeiture. To

rule otherwise would be similar to saying that prior to the accrual
of the local government’s right as a purchaser, an additional
requirement of issuing a declaration of forfeiture is necessary. Not
only is this duty unfounded, but it also places the local
government in a vacuum from the time of the auction up to the
time it issues the document. It causes the absurd situation, where
the local government’s forfeiture of the property for want of a
bidder becomes an empty and meaningless exercise merely
because the issuance of the declaration of forfeiture came at a
much subsequent time. The precarious effect of this view strips off
the local government of the protection given by law to a purchaser
during and after a public auction. This goes against the
safeguards to which a purchaser is entitled until a valid
redemption of the property ensues because then, it is burdened
with yet another positive act of issuing a document in order to
gain rights. Surely, this is not the intention of Section 263. The
local government’s power to acquire tax delinquent properties
cannot be overemphasized at this point.
Estoppel; The general rule is that the State cannot be put in
estoppel by the mistakes or errors of its officials or agents.—The
general rule is that the State cannot be put in estoppel by the
mistakes or errors of its officials or agents. Indeed, like all general
rules, this is also subject to exceptions. Estoppel should not be
invoked except in a rare and unusual circumstance. It may not be
invoked where they would operate to defeat the effective
operation of a policy adopted to protect the public. They must be
applied with circumspection and should be applied only in those
special cases where the interests of justice clearly require it.
Tax Sales; Redemption; The policy of enabling local
governments to fully utilize the income potentialities of the real
property tax would be put at a losing end if tax delinquent
properties could be recovered by the sheer expediency of a
document erroneously or, perhaps fraudulently, issued by its
officers.—It is the City that would suffer an injustice if it were to
be bound by its officer’s suspect actions. The policy of enabling
local governments to fully utilize the income potentialities of the
real property tax would be put at a losing end if tax delinquent
properties could be recovered by the sheer expediency of a
document erroneously or, perhaps fraudulently, issued by its
officers. This would place at naught, the essence of

 
 
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redemption as a statutory privilege; for then, the statutory

period for its exercise may be extended by the indiscretion of
scrupulous officers. In other words, the period would become
flexible because extensions of the period would depend, not just on
the sound discretion of the City Treasurer but on his attitude,
work ethics and worse, temperament.

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
  Dominguez, Paderna & Tan Law Office for respondent.

MENDOZA, J.:
 
This is a petition for review on certiorari under Rule 45
of the Rules of Court assailing the January 24, 2013
Decision1 and the May 15, 2013 Resolution2 of the Court of
Appeals (CA), in C.A.-G.R. CV No. 01903-MIN, which
affirmed the June 6, 2008 Decision of the Regional Trial
Court, Branch 17, Davao City (RTC), ordering the City of
Davao to, among others, receive the amount of
P5,000,000.00 as full payment of the redemption price of
the forfeited properties of the Intestate Estate of Amado S.
Dalisay.
 
The Facts
 
The Estate of Amado S. Dalisay (the Estate) owned the
following properties, all situated in Davao City:
1. Lot 1, Pcs-11-001298, covered by Transfer
Certificate of Title (TCT) No. T-202211 with Tax
Declaration No. E-1-34-10484;

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 1   Rollo, pp. 37-47. Penned by Associate Justice Renato C. Francisco,
with Associate Justices Edgardo A. Camello and Oscar V. Badelles,
concurring, Twenty-Second Division, Cagayan De Oro City.
2  Id., at pp. 48-49.

 
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City of Davao vs. Intestate Estate of Amado S. Dalisay

2. Lot 6, Pcs-11-001298, covered by TCT No. T-202215

with Tax Declaration No. E-1-34-10488;
3. Lot 7, Pcs-11-001298, covered by TCT No. T-202216
with Tax Declaration No. E-1-34-10489;
4. Lot 2, Pcs-11-001298, covered by TCT No. T-202212
with Tax Declaration No. E-1-34-10492; and
5. Building erected in Lot No. 26-B and covered by Tax
Declaration No. E-1-34-10480.
These properties were advertised for sale at a public
auction for nonpayment of real estate taxes. The public
auction was scheduled on July 19, 2004. No bidders
appeared on the date of the public auction, thus, the
aforesaid properties were acquired by the City Government
of Davao (the City) pursuant to Section 263 of Republic Act
(R.A.) No. 7160 of the Local Government Code of 1991
(LGC) which provides:

Section 263. Purchase of Property By the Local Government

Units for Want of Bidder.—In case there is no bidder for the real
property advertised for sale as provided herein, the real property
tax and the related interest and costs of sale, the local treasurer
conducting the sale shall purchase the property in behalf of the
local government unit concerned to satisfy the claim and within
two (2) days thereafter shall make a report of his proceedings
which shall be reflected upon the records of his office. It shall be
the duty of the Registrar of Deeds concerned upon registration
with his office of any such declaration of forfeiture to transfer the
title of the forfeited property to the local government unit
concerned without the necessity of an order from a competent
court.
Within one (1) year from the date of such forfeiture, the
taxpayer or any of his representative, may redeem the property by
paying to the local treasurer the full amount of the real property
tax and the related interest and the costs of sale. If the property is
not redeemed as provided herein, the ownership thereof shall be
vested on the local government unit concerned.
  
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104 SUPREME COURT REPORTS ANNOTATED

City of Davao vs. Intestate Estate of Amado S. Dalisay

On September 13, 2005, or more than a year after the

public auction, the Declarations of Forfeiture for the five (5)
properties were separately issued by the City Treasurer.
The common provisions of the declarations read:

WHEREAS, the delinquent taxpayer or his authorized

representative, has within a period of one (1) year from
said date of Declaration of Forfeiture as herein specified,
to redeem the property sold by paying to the City Treasurer
the full amount of the real property tax and related interest and
cost of sale as authorized under R.A. 7160. If the property is not
redeemed as herein provided, the ownership of the above
described property shall be fully vested to the City Government of
Davao in accordance with Section 263 of R.A. 7160.
NOW, THEREFORE, for and in accordance of the foregoing, I
RODRIGO S. RIOLA, in my capacity as the Acting City Treasurer
of Davao City, and pursuant to the provision of Section 262 of
Republic Act 7160 otherwise known as the Local Government
Code of 1991 hereby DECLARE AS IT HEREBY DECLARED
the above described property FORFEITED in favor of the
City Government of Davao.
EXECUTED in Davao City, Philippines, this 13th day of
September 2005.
       [Emphases supplied]

 
On October 3, 2005, the City caused the annotation of
the five (5) Declarations of Forfeiture on the corresponding
TCTs of the properties.
Subsequently, the Estate inquired from the City
Treasurer’s Office regarding the amount of the redemption
price of the properties. On September 11, 2006, the Real
Property Tax Division of the City furnished the Estate
copies of the billing statements containing a handwritten
summary of the amount showing the aggregate total of
P4,996,534.67.
 
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Thus, on September 13, 2006, the Estate delivered a

written tender of payment to the City Treasurer and, at the
same time, tendered the amount of P5,000,000.00. The
City, however, refused to accept the same. This constrained
the Estate to file the Notice to Deposit the P5,000,000.00
with the Office of the Clerk of Court, RTC, at the disposal
of the City Treasurer. In doing so, the Estate was made to
pay legal fees amounting to P75,200.00. An action for
redemption, consignation and damages against the City
was consequently filed by the Estate with the RTC.
For its part, the City admitted the existence of the
billing statements, but it posited that their issuance was
not an admission that the Estate still had the right to
redeem the properties. The period of redemption had long
expired on July 19, 2005, a year after the subject properties
were acquired by the City during the public auction for
want of a bidder. Hence, its refusal to accept the tendered
amount was valid and for a lawful cause.
On June 6, 2008, the RTC ruled in favor of the Estate,
finding the latter’s evidence as preponderantly acceptable
in establishing its right of redemption. The City was
ordered to: 1) receive the P5,000,000.00 deposited with the
Clerk of Court, as full payment of the redemption price of
the forfeited properties; and 2) issue a certificate of
redemption in favor of the Estate. Further, actual damages
and attorneys fees in the amount of P75,200.00 and
P50,000.00, respectively, were awarded in favor of the
Estate.3
 
Aggrieved, the City appealed the RTC decision to the
CA, arguing that the one (1)-year period should be
reckoned from the date of forfeiture, that is, when the
properties of the Estate were purchased by the City for
want of a bidder during the public auction on July 19, 2004.
In the same vein, the RTC erred in holding that the City
was estopped from disclaiming and denying the erroneous
statement made by the

_______________

3  Id., at pp. 37-38.

 
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 City of Davao vs. Intestate Estate of Amado S. Dalisay

City Treasurer when the Estate was inadvertently

informed that the one-year redemption period started from
the date of the issued Declaration of Forfeiture.
To this, the Estate countered that the reckoning date
should be the one stated in the Declarations of Forfeiture
which corresponded to their date of issuance, to wit, on
September 13, 2005.
In the assailed decision, the CA affirmed the ruling of
the RTC. It observed that the City had been remiss in its
duty to immediately issue the Declaration of Forfeiture
within two (2) days from purchase of the property as
required under Section 263 of the LGC. The CA then
explained that “redemption should be looked upon with
favor, and where no injury would follow, a liberal
construction will be given to redemption laws, specifically
on the exercise of the right to redeem.” In the words of the
CA:

In the case at bench, We have come to the conclusion upon

inquiry into the equities of this case to liberally apply the
redemption provision of the law in favor of the Estate of Amado
Dalisay and give them another opportunity to recover the
properties.
It must be stressed that the delinquent taxpayer may within
one (1) year from the date of such forfeiture, redeem the
property by paying to the local treasurer the full amount of the
real property tax and the related interest and the costs of sale.
The City, by its own inefficiency, belatedly issued the
DECLARATIONS OF FORFEITURE on September 13, 2005.
Such is no fault of the plaintiff-appellee.4
[Emphasis and underscoring in the original]

      
As regards the issue on damages, the CA found the
award of attorney’s fees proper, in accordance with Article
2208 of the Civil Code which allowed an award of the said
fees and

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4  Id., at p. 46.

 
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expenses of litigation, other than judicial costs, when by

the act or omission of one party, compelled the other to
litigate and incur expenses of litigation to protect his
interest.5 In this case, the City’s refusal to accept the
Estate’s tendered payment for the redemption of the lots
had effectively constrained it to file suit. Lastly, the actual
damages in the amount of P75,200.00 as consignation fees
had been proven with the corresponding receipt.
Hence, this petition.
 
Assignment of Errors

1. THAT THE HONORABLE COURT ERRED IN HOLDING

THAT THE ONE-YEAR REDEMPTION PERIOD BEGINS
FROM THE DATE OF DECLARATION OF FORFEITURE
ISSUED BY THE CITY TREASURER ON SEPTEMBER 13,
2006, INSTEAD OF JULY 19, 2004, WHEN THE SUBJECT
DELINQUENT PROPERTIES WERE FORFEITED BY THE
CITY GOVERNMENT FOR WANT OF BIDDER DURING THE
PUBLIC AUCTION SALE;
2. THAT THE HONORABLE COURT ERRED IN HOLDING
THAT THE CITY GOVERNMENT IS ESTOPPED FROM
DISCLAIMING AND DENYING THE ERRONEOUS
STATEMENT MADE BY THE CITY TREASURER IN HIS
DECLARATION OF FORFEITURES DATED SEPTEMBER 13,
2006, WHICH INADVERTINTLY (SIC) INFORMED THE
PLAINTIFF THAT THE ONE-YEAR REDEMPTION PERIOD
STARTS FROM THE DATE OF DECLARATION;
3. THAT THE HONORABLE COURT ERRED IN HOLDING
THAT THE PROVISION OF SECTION 263 OF R.A. 7160,
OTHERWISE KNOWN AS THE “LOCAL GOVERNMENT CODE
OF 1991” DID NOT EXPRESSLY REPEAL THE PERTINENT
PROVISION OF REDEMPTION UNDER P.D. 464, THE LAW
GOVERN-

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5  Id., at pp. 46-47.

 
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City of Davao vs. Intestate Estate of Amado S. Dalisay
ING REAL PROPERTY TAXATION THEN, AND ACT 496,
SECTIONS 50 AND 377 GRANTING THE RIGHT OF
REDEMPTION TO BE EXERCISED WITHIN ONE YEAR FROM
THE REGISTRATION OF SAID FORFEITED PROPERTIES IN
THE REGISTER OF DEEDS;
4. THAT THE HONORABLE COURT ERRED IN HOLDING
PUBLIC DEFENDANT-APPELLANT LIABLE TO PAY
PLAINTIFF FOR ACTUAL DAMAGES IN THE AMOUNT OF
P75,200.00 AS CONSIGNATION FEES AND ATTORNEY’S
FEES AMOUNTING TO P50,000.00.6

 
The City argues that no law provides that the one (1)
year redemption period should be counted from the date of
the Declaration of Forfeiture. What the LGC simply
provides is that the period of redemption is “within one (1)
year from the date of such forfeiture.” For the City, this
phrase means that the effective date of the forfeiture was
July 19, 2004, when the tax delinquent properties were
sold at a public auction and, thus, forfeited in its favor for
want of a bidder, rather than September 13, 2005 or the
date of the issued Declarations of Forfeiture.
Further, and contrary to the observation of the CA,
Section 263 of the LGC does not order the City Treasurer to
issue a declaration of forfeiture within two (2) days from
the date when tax delinquent real properties, sold at
auction sale, are purchased by the local government in the
absence of a bidder. It merely directs the local treasurer to
make a report of his proceedings which shall be reflected in
the records of his office. In fine, it is the position of the City
that the issuance of the said declarations of forfeiture had
no bearing in the determination of the period of
redemption, inasmuch as the same were only issued for
registration purposes with the Register of Deeds.7 Here,
the date of issuance of the five (5)

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6  Id., at p. 27.
7  Id., at p. 30.

 
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declarations of forfeiture on September 13, 2005 was
immaterial as the same was merely intended to facilitate
the transfers of title to the forfeited properties in favor of
the City after the lapse of the redemption period reckoned
from the auction sale held on July 19, 2004.
Assuming arguendo that the City Treasurer is
mandated by law to issue a declaration of forfeiture within
two (2) days from the purchase of the properties, the City
avers that it should not be bound by the consequences of
the malfeasance of its public officers. In other words, the
City invokes the doctrine that the principle of estoppel does
not operate against the government for the act of its
agents, and that it is never estopped by any mistake or
error on their part.8
 
Position of the Estate
 
For its part, the Estate argues that the City erred when
it interpreted the subject provision and concluded that
“[t]he law does not say that the one (1)-year period of
redemption is counted from the date of ‘declaration of
forfeiture.’”9 It explained that the provision merely states
that the redemption period is counted from “the date of
such forfeiture,” and the word “such” before the word
“forfeiture” was resorted to in order to avoid the repetition
of the words “declaration of” before the word “forfeiture.”10
This interpretation is supported by the second paragraph of
the same provision which mentions the phrase, “any such
declaration of forfeiture” in connection with the duty of the
Register of Deeds to transfer the title of the forfeited
property to the local government unit sans a court order.
The Estate submits that the subject provision should be
read as follows:

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8   La Bugal-B’laan Tribal Association, Inc. v. Ramos, 486 Phil. 754,

881; 421 SCRA 148, 246 (2004).
9   Rollo, p. 84.
10  Id., at p. 85.

 
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City of Davao vs. Intestate Estate of Amado S. Dalisay
 Within one (1) year from the date of declaration of
forfeiture the taxpayer or any of its representative, may redeem
the property by paying to the local treasurer the full amount of
the real property tax and the related interest and costs of sale. If
the property is not redeemed as provided herein, the ownership
thereof shall be fully vested in the local government unit
concerned.11
[Emphasis supplied]

 
The Estate likewise opposes the City’s theory that
declarations of forfeiture have no bearing in the
determination of the period of redemption because the
same were only issued by the treasurer for registration
purposes with the Register of Deeds. For the Estate, there
is a difference between redemption of property sold at a
public auction and redemption of property purchased by
the local government unit for want of bidder. The former is
governed by Section 261 of the LGC, while the latter is
covered by Section 263(2) of the same law.
 
Reply of the City
 
The City replies that the term “such” as found in the
phrase, “date of such forfeiture,” should be construed as
referring to the entire legal process of forfeiture as
prescribed in the first paragraph of Section 263 and not to
the singular word, “declaration,” as found in the second
sentence of the said paragraph. More importantly, the
operative act of forfeiture is the act of the City Treasurer,
in behalf of the city, in purchasing the property for lack of a
bidder, and not the registration of any declaration of
forfeiture because the said document only facilitates the
transfer of ownership of the property. The City also makes
reference to Section 261 of the LGC, involving the
redemption of tax delinquent properties purchased by the
public, which provides that the redemption of the property
is to be reckoned from the date of the sale. For

_______________

11  Id.

 
 
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the City, this rule is equally applicable in resolving the

present case involving Section 263 of the LGC because the
distinctions between the said provisions are too
insignificant, for the Court to rule otherwise. Regardless of
whether the property put up for auction was purchased by
the public or by the local government for want of a bidder,
the commencement of the period for redemption must begin
on the date of the sale, for the sake of uniformity in the
rules.12
 
The Issue
 
After a perusal of the arguments presented by the
parties, the Court culled the main issue into this
significant question of law:

Whether the one (1)-year redemption period of forfeited

tax delinquent properties purchased by the local
government for want of a bidder is reckoned from the date
of the auction or sale or from the date of the issuance of
the declaration of forfeiture.

 
The Court’s Ruling
 
In its decision, the CA obviously resorted to an
interpretation based solely on the basic rules in
interpretation: the liberal application of redemption laws.
It inquired into the “equities of this case” and preferred to
uphold the protection afforded to the original owner of the
property as it is “the policy of the law to aid rather than
defeat the owner’s right.”13
The Court need not belabor the existence of this rule in
jurisprudence. In a long line of cases, the Court has indeed
been copious in its stance to allow the redemption of
property where in doing so, the ends of justice are better
realized.

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12  Id., at pp. 116-133.

13  Id., at p. 46.

 
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City of Davao vs. Intestate Estate of Amado S. Dalisay

Doronila v. Vasquez14 allowed redemption in certain

cases even after the lapse of the one-year period in order to
promote justice and avoid injustice. In Tolentino v. Court of
Appeals,15 the policy of the law to aid rather than defeat
the right of redemption was expressed, stressing that
where no injury would ensue, liberal construction of
redemption laws was to be pursued and the exercise of the
right to redemption to be permitted to better serve the ends
of justice. In De los Reyes v. Intermediate Appellate Court,16
the rule was liberally interpreted in favor of the original
owner of the property to give him another opportunity,
should his fortunes improve, to recover his property.
Nonetheless, the Court’s agreement with the CA
decision ends here. The above rulings now beget a more
important question for the resolution of this case: Does a
simplistic application of the liberal construction of
redemption laws provide a just resolution of this case? The
Court answers this question in the negative.
While it is a given that redemption by property owners
is looked upon with favor, it is equally true that the right to
redeem properties remains to be a statutory privilege.17
Redemption is by force of law, and the purchaser at public
auction is bound to accept it.18 Further, the right to redeem
property sold as security for the satisfaction of an unpaid
obligation does not exist preternaturally. Neither is it
predicated on proprietary right, which, after the sale of the
property on execution, leaves the judgment debtor and
vests in the pur-

_______________

14  72 Phil. 572 (1941).

15  193 Phil. 663; 106 SCRA 513 (1981).
16  257 Phil. 406; 176 SCRA 394 (1989).
17  Mateo v. Court of Appeals, 99 Phil. 1042 (1956).
18  De Robles v. Court of Appeals, G.R. No. 128053, June 10, 2004, 431
SCRA 566, 570, citing Natino v. Intermediate Appellate Court, 274 Phil.
602; 197 SCRA 323 (1991).

 
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chaser. Instead, it is a bare statutory privilege to be
exercised only by the persons named in the statute.19
In other words, a valid redemption of property must
appropriately be based on the law which is the very source
of this substantive right. It is, therefore, necessary that
compliance with the rules set forth by law and
jurisprudence should be shown in order to render validity
to the exercise of this right. Hence, when the Court is
beckoned to rule on this validity, a hasty resort to
elementary rules on construction proves inadequate.
Especially so, when there are deeper underpinnings
involved, not only as to the right of the owner to take back
his property, but equally important, as to the right of the
purchaser to acquire the property after deficient
compliance with statutory requirements, including the
exercise of the right within the period prescribed by law.
The Court cannot close its eyes and automatically rule
in favor of the redemptioner at all times. The right
acquired by the purchaser at an execution sale is inchoate
and does not become absolute until after the expiration of
the redemption period without the right of redemption
having been exercised. “But inchoate though it be, it is, like
any other right, entitled to protection and must be
respected until extinguished by redemption.”20 Suffice it to
say, the liberal application of redemption laws in favor of
the property owner is not an austere solution to a
controversy, where there are remarkable factors that lead
to a more sound and reasonable interpretation of the law.
Here, the proper focus of the CA should have been the just
and fair interpretation of the law, instead of an automatic
and constricted view on its liberal application.

_______________

19  Paray v. Rodriguez, 515 Phil. 546, 554; 479 SCRA 571, 579 (2006),
citing Magno v. Viola, 61 Phil. 80, 84 (1934).
20   Heirs of Blancaflor v. Court of Appeals, 364 Phil. 454, 463; 304
SCRA 796, 802-803 (1999), citing Bautista v. Fule, 85 Phil. 391, 393
(1950).

 
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City of Davao vs. Intestate Estate of Amado S. Dalisay
 It is without question that Section 263 of the LGC lacks
definiteness as to the reckoning point for the redemption of
tax delinquent properties. It merely employs the phrase,
“within one (1) year from the date of such forfeiture.” On one
hand, the City avers that the period commences from the
date of the forfeiture, that is, the date of the auction. On
the other hand, the Estate insists that the redemption
period begins from the date when the declarations of
forfeiture were issued.
For the Court, the arguments of the City point toward a
more just and fair resolution of the perceived vagueness in
the law.
First. The City’s theory that the term “forfeiture,”
contemplated in the subject phrase, refers to the date when
the tax delinquent properties were sold at a public auction,
holds more logic than the conjecture of the Estate on the
usage of the word “such.”
Indeed, Section 263 of the LGC takes into effect because
of one vital factor: the absence of a bidder in a public
auction for tax delinquent properties. Were it not for this
fact, this provision would not come into operation or, at the
least, find relevance. Sections 260 and 261 would have
come into play in cases where a purchaser, other than the
local government unit, places a bid on the property. This is
undeniably a distinct feature of Section 263 that cannot be
ignored. The absence of the public impels the City
Treasurer to purchase the property in behalf of the city.
Reason would, therefore, dictate that this purchase by the
City is the very forfeiture mandated by the law. The
contemplated “forfeiture” in the provision points to the
situation where the local government ipso facto “forfeits”
the property for want of a bidder.
This analysis is ridden with substance that surpasses
the hypothesis of the Estate. The Estate purely speculates
that the term “such” in the phrase “the date of such
forfeiture,” was only resorted to in order to avoid the
repetition of the words in the text of the law. It attempts to
convince the Court that the second paragraph of the same
provision which men-
 
 
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tions the phrase, “any such declaration of forfeiture,” in
connection with the duty of the Register of Deeds to
transfer the title of the forfeited property, shows that the
“forfeiture” contemplated by the law is that of the issuance
of the Declaration of Forfeiture. While the Estate has a
point in saying that the City may not speciously insist that
the law does not say that the one (1)-year period of
redemption is counted from the date of “declaration of
forfeiture,” this proffered explanation is far more hallow
and unfounded.
As explained above, the better theory that is consistent
with the subject matter of the provision is that forfeiture of
tax delinquent properties transpires no later than the
purchase made by the city due to lack of a bidder from the
public. This happens on the date of the sale, and not upon
the issuance of the declaration of forfeiture.
To rule otherwise would be similar to saying that prior
to the accrual of the local government’s right as a
purchaser, an additional requirement of issuing a
declaration of forfeiture is necessary. Not only is this duty
unfounded, but it also places the local government in a
vacuum from the time of the auction up to the time it
issues the document. It causes the absurd situation, where
the local government’s forfeiture of the property for want of
a bidder becomes an empty and meaningless exercise
merely because the issuance of the declaration of forfeiture
came at a much subsequent time. The precarious effect of
this view strips off the local government of the protection
given by law to a purchaser during and after a public
auction. This goes against the safeguards to which a
purchaser is entitled until a valid redemption of the
property ensues because then, it is burdened with yet
another positive act of issuing a document in order to gain
rights. Surely, this is not the intention of Section 263. The
local government’s power to acquire tax delinquent
properties cannot be overemphasized at this point.
 
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City of Davao vs. Intestate Estate of Amado S. Dalisay

Second. The CA seemed to have completely disregarded

the ruling in City Mayor v. RCBC (City Mayor)21 in its
quick application of the liberal rules of statutory
construction. True, City Mayor involved Section 261 of the
LGC, instead of Section 263, because it involved a private
individual who was adjudged as the highest bidder during
the public auction. Nevertheless, the said case passed upon
the very issue at bench: the reckoning period of the
redemption period for auctioned tax delinquent properties.
In City Mayor, the property owner and respondent bank
filed a petition for the acceptance of its tender of payment
and for the subsequent issuance of the certificate of
redemption, after the highest bidder during the auction
had effected payment of the tax delinquencies and the
issuance and registration of the corresponding Certificate
of Sale of Delinquent Property. The lower court ruled in
favor of the respondent bank on the ground that “the
counting of the one (1)-year redemption period of tax
delinquent properties sold at public auction should start
from the date of registration of the certificate of sale or the
final deed of sale in favor of the purchaser” based on
Section 78 of Presidential Decree (P.D.) No. 464.22

_______________

21  640 Phil. 517; 626 SCRA 469 (2010).

22   Section 78. Redemption of real property after sale.—Within the
term of one year from the date of the registration of sale of the property,
the delinquent taxpayer or his representative, or in his absence, any
person holding a lien or claim over the property, shall have the right to
redeem the same by paying the provincial or city treasurer or his deputy
the total amount of taxes and penalties due up to the date of redemption,
the costs of sale and the interest at the rate of twenty per centum on the
purchase price, and such payment shall invalidate the sale certificate
issued to the purchaser and shall entitle the person making the same to a
certificate from the provincial or city treasurer or his deputy, stating that
he had redeemed the property.
The provincial or city treasurer or his deputy shall, upon surrender by
the purchaser of the certificate of sale previously issued to

 
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The Court, however, disagreed with the lower court’s

position, viz.:

However, since the passing of R.A. No. 7160, such is no longer

controlling. The issue of whether or not R.A No. 7160 or the Local
Government Code, repealed P.D. No. 464 or the Real Property Tax
Code has long been laid to rest by this Court. Jurisdiction thrives
to the effect that R.A. No. 7160 repealed P.D. No. 464. From
January 1, 1992 onwards, the proper basis for the computation of
the real property tax payable, including penalties or interests, if
applicable, must be R.A. No. 7160. Its repealing clause, Section
534, reads:
SECTION 534. Repealing Clause.—
x x x x
(c) The provisions of Sections 2, 3, and 4 of Republic Act No.
1939 regarding hospital fund; Section 3, a(3) and b(2) of Republic
Act No. 5447 regarding the Special Education Fund; Presidential
Decree No. 144 as amended by Presidential Decree Nos. 559 and
1741; Presidential Decree No. 231 as amended; Presidential
Decree No. 436 as amended by Presidential Decree No. 558; and
Presidential Decrees Nos. 381, 436, 464, 477, 526, 632, 752, and
1136 are hereby repealed and rendered of no force and effect.
Inasmuch as the crafter of the Local Government Code clearly
worded the above cited Section to repeal P.D. No. 464, it is a clear
showing of their legislative intent that R.A. No. 7160 was to
supersede P.D. No. 464. As such, it is apparent that in case of sale
of tax delinquent properties, R.A. No. 7160 is the general law
applicable.
x x x

_______________

him, forthwith return to the latter the entire purchase price paid by
him plus the interest at twenty per centum per annum herein provided for,
the portion of the cost of the sale and other legitimate expenses incurred
by him, and said property shall thereafter be free from the lien of said
taxes and penalties.

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City of Davao vs. Intestate Estate of Amado S. Dalisay

From the foregoing, the owner of the delinquent real

property or person having legal interest therein, or his
representative, has the right to redeem the property
within one (1) year from the date of sale upon payment of
the delinquent tax and other fees. Verily, the period of
redemption of tax delinquent properties should be
counted not from the date of registration of the certificate
of sale, as previously provided by Section 78 of P.D. No.
464, but rather on the date of sale of the tax delinquent
property, as explicitly provided by Section 261 of R.A. No.
7160.
[Emphases and underscoring supplied]

 
It is worthy to note, however, that City Mayor was
ultimately resolved in favor of respondent bank because it
turned out that petitioner city government enacted an
ordinance, which provided for the procedure in the
collection of delinquent taxes on real properties within its
territorial jurisdiction. Section 14(a) paragraph 7 of the
said ordinance expressly set the redemption period within
one (1) year from the date of the annotation of the sale of
the property at the proper registry. Being a special law
with limited territorial application, the city ordinance
prevailed over that of the LGC which was, and still is, the
general law on the matter. Consequently, the respondent
bank had until February 10, 2005 to redeem the subject
properties counted from the date of registration of the
Certificate of Sale of Delinquent Property on February 10,
2004. Its tender of payment of the subject properties’ tax
delinquencies and other fees on June 10, 2004, was then
well within the redemption period.
It is now apparent that the previous rule enunciating
the reckoning period of redemption for tax delinquent
properties from the date of the registration of sale of the
property is no longer controlling. Section 261 now
mandates that the owner of the delinquent real
property or person having legal interest therein, or
his representative, has the right to redeem the
property within one (1) year from the date
 
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of sale upon payment of the delinquent tax and other

fees.
In the case at bench, considering the fact that neither of
the parties has invoked the existence of an ordinance of
similar import, the general law on the matter finds
bearing. In applying the pronouncements in City Mayor to
this case, the Court finds no harm in considering the
interpretation of Section 261 which is emphatic in saying
that the redemption period is set “within one (1) year from
the date of sale,” as applicable to Section 263. The usage of
the terms “sale” and “forfeiture” in Sections 261 and 263,
respectively, only highlights a distinction in the situations
covered and produces no significant variance. The former
refers to the voluntary purchase made by a bidder in public
auction while the latter points to the divesting of the
ownership of a particular property on account of the breach
of a legal duty, without compensation,23 for example, the
nonpayment of tax. Therefore, in cases covered by these
pertinent provisions in the LGC, the date of the “sale” or
“forfeiture” is rightfully the point in time when the owner
is divested of certain attributes of ownership over the
property albeit only until the redemption of the property.
This translates to no other event but to the date of the
public auction. More than the purpose of uniformity and
harmony among provisions of law, the Court finds this
conclusion as consistent with the intention of the law.
Third. At this juncture, the Court considers the peculiar
fact involved in this case: the City Treasurer’s belated
issuance of the disputed Declarations of Forfeiture. Clearly,
this irregularity had eventually shaped and brought forth
the subject controversy. Had it not been for the severe
delay in the issuance, there would have been no dispute
and the reckoning period of the redemption period would
have been a toss between closer dates, rather than those
claimed, which are years apart, to wit: July 19, 2004 and
September 13, 2005.

_______________

23  Webster’s Third New International Dictionary, 1993.

 
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City of Davao vs. Intestate Estate of Amado S. Dalisay

The general rule is that the State cannot be put in

estoppel by the mistakes or errors of its officials or
agents.24 Indeed, like all general rules, this is also subject
to exceptions. Estoppel should not be invoked except in a
rare and unusual circumstance. It may not be invoked
where they would operate to defeat the effective operation
of a policy adopted to protect the public. They must be
applied with circumspection and should be applied only in
those special cases where the interests of justice clearly
require it.25
 The Court, however, can only commiserate with the
situation of the state and its lost chance of recovering its
property, as it still sees no reason to depart from the
general rule. The following circumstances became the
object of the Court’s perplexity:
1. The Estate does not dispute the validity of the
notices with respect to the public auction. This brings the
Court to the safe assumption that there was valid
constructive notice as to possible danger of forfeiture of the
properties prior to the auction. The Estate, with its
administrator in the person of Nicasio B. Paderna, is
undoubtedly bound by this. Corollary thereto, the
delinquent status of the properties may not be said to have
been surprising news to the Estate.
2. Just the same, it took the Estate more than one (1)
year from the date of the auction of which it was properly
notified, to inquire from the City Treasurer’s Office
regarding the amount of the redemption price due. On the
same date of inquiry or on September 11, 2006, the Estate
was furnished a handwritten summary of the amount due
for redemption. It is fair to suppose that at this point, the
Estate became aware that no declaration of forfeiture had
yet been issued by the City Treasurer.

_______________

24  Republic v. Court of Appeals, 361 Phil. 319, 329; 301 SCRA 366, 377
(1999), citing Lim v. Pacquing, 310 Phil. 722, 757; 240 SCRA 649, 671
(1995).
25  Id., citing 31 CJS 675-676.

 
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3. Two (2) days after this inquiry, and as if a reaction

thereto, the City Treasurer issued the subject five (5)
Declarations of Forfeiture on September 13, 2006. Now
with full confidence on the said document and its expressed
statement that the property owner had one year from the
date of its issuance, within which to redeem the properties,
the Estate lost no time in tendering its payment for the
redemption of the properties.
The delay on the part of the Estate to at least inquire
into the outcome of the auction and its misplaced reliance
on a curious document heightens the belief of the Court
that the City may not be deprived of a right that has long
been vested in its favor. The odd timing in the issuance of
the Declarations of Forfeiture and its very contents which
observably benefit the Estate to the core form a nagging
doubt that may not be easily shrugged off. This hinders the
Court from applying the exceptions to the rule on estoppel,
when doing this would result in more impropriety.
It is the City that would suffer an injustice if it were to
be bound by its officer’s suspect actions. The policy of
enabling local governments to fully utilize the income
potentialities of the real property tax would be put at a
losing end if tax delinquent properties could be recovered
by the sheer expediency of a document erroneously or,
perhaps fraudulently, issued by its officers. This would
place at naught, the essence of redemption as a statutory
privilege; for then, the statutory period for its exercise may
be extended by the indiscretion of scrupulous officers. In
other words, the period would become flexible because
extensions of the period would depend, not just on the
sound discretion of the City Treasurer but on his attitude,
work ethics and worse, temperament.
The Court cannot allow this situation to prevail.
In this case, the period to redeem the subject properties
of this case had long expired on July 19, 2005, and since
then, the forfeiture of the properties had become absolute.
The
 

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City of Davao vs. Intestate Estate of Amado S. Dalisay

failure of the Estate to validly exercise its right of

redemption within the statutory period had already
resulted in the consolidation of ownership over the
properties by the City.
One final word. The resolution of this case does not, in
any way, cloud the glaring misfeasance in office committed
by the City Treasurer. As discussed, this legal battle could
not have developed were it not for the lull of more than a
year between the subject auction and the issuance of the
declarations of forfeiture. More often than not, inordinate
delay in the issuance of documents, whether out of a
ministerial or directory function, creates an injurious effect
to the parties concerned. This inefficiency in the
bureaucracy must be thwarted lest the quality of public
service in local governments deteriorate and personal
rights suffer. No less than the Constitution sanctifies the
principle that a public office is a public trust, and enjoins
all public officers and employees to serve with the highest
degree of responsibility, integrity, loyalty, and efficiency.26
These attributes, by all means, are expected of a City
Treasurer.
WHEREFORE, the assailed January 24, 2013 Decision
of the Court of Appeals and its May 15, 2013 Resolution in
C.A.-G.R. CV No. 01903-MIN are REVERSED and SET
ASIDE. No costs.
The action for redemption, consignation and damages
filed by respondent Estate is ordered DISMISSED.
SO ORDERED.

Peralta,** Bersamin,*** Del Castillo**** (Acting

Chairperson) and Leonen, JJ., concur.

_______________

26  Article XI, Section 1, 1987 Constitution.

**  Designated acting member per Special Order No. 2088 dated July 1,
2015.
***  Designated acting member per Special Order No. 2079 dated June
29, 2015.
****  Per Special Order No. 2087 (Revised) dated July 1, 2015.

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Judgment and resolution reversed and set aside.

Notes.—Since National Housing Authority (NHA) is

liable neither for real property taxes nor for the bond
requirement in Section 267, it necessarily follows that any
public auction sale involving property owned by NHA
would be null and void and any suit filed by the latter
questioning such sale should not be dismissed for failure to
pay the bond. (National Housing Authority vs. Iloilo City,
562 SCRA 629 [2008])
The written notice requirement for purposes of the
exercise of the right of redemption is indispensable.
(Pascual vs. Ballesteros, 666 SCRA 297 [2012])
 
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